This week, Business Insider released a slide deck on “The Future of Retail 2014”. The data is US-centric and supports what the retail sector has come to hold true – that retail is undergoing a seismic shift and ecommerce is capturing a greater share of total spend than ever before.
One particular graph, based on US census data, shows the pace of change is different by categories. In 2011, overall online share of total retail spend was 8%. The two largest categories – F&B and Health and Personal Care are well below average. Domains of grocery stores and drug stores – eCommerce growth has been modest. Other 4 categories are “speciality retail” from Clothing and Accessories (12%) to Media, Sporting and Hobby goods (24%). The growing share of these markets are online and this growth is exponential.
Being census data, the actual data points, while likely to be accurate, are a little latent. So BII has developed a forecast until 2020, which if in anyway accurate, has Clothing and Accessories online retail sales at almost 25% of total, Electronics and Appliances at 50% and Media, Sporting and Hobby goods nudging close to 70% online.
What relevancy may this have for mall owners?
For mall owners, this shift by category has a clear and present impact on everything. From space utilisation and leasing decisions to business models and channels to market. It follows, as some retailers within those categories respond to the seismic shift in consumer purchase behaviour and associated growth in revenues transacted online and on mobile in a progressive manner, others will be less enthusiastic. As a mall owner, which retailer would you rather have inside your mall? The ones who pay tenancy but who are unlikely to have a loyal patronage or sustainable business in ten, five or even two years from now? Retailers who drive traffic through integrated sales strategies, in-store discovery tools and more convenient payment and collection options?
It appears that this call can be made on a category-by-category basis.
“The Future of Retail 2014” slide deck is available for download by BII subscribers.
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